Equity markets don't go up linearly in one direction. Although, it may seem like that in the last four-and-a-half-years.
By: Value Research
But there are many periods where equities either are flat or negative as well.
So, if you are fully invested in equities and suddenly you need money, you may be forced to exit at the wrong time.
So, let's look at what happened in the Covid period. People who did not have any savings, or any emergency corpus, some of them had job losses post-Covid, and they were forced to exit equities, even though that was actually the time to buy equities.
So, having proper asset allocation is the key.